Circle faces charges over refusal to recover stolen USDC

Circle faces criminal complaints for not complying with court orders to recover stolen USDC, citing technical limits. The case highlights tensions between crypto firms and law enforcement.

Circle Internet Financial, the issuer of the USDC stablecoin, is under increasing legal scrutiny after prosecutors in Wisconsin and New York accused the company of failing to comply with court orders to recover stolen USDC funds linked to scam victims. Reports indicate that Wisconsin prosecutors filed a misdemeanor criminal complaint, alleging Circle intentionally disobeyed a judicial warrant. The warrant required Circle to invalidate frozen USDC tokens and reissue them to law enforcement wallets. The cases involve losses exceeding $1.2 million from local residents affected by separate scams. While Circle complied with requests to freeze the stolen assets, it refused further action, arguing it lacked the technical ability to burn and reissue tokens as requested. Circle has called the charges meritless and filed a motion to dismiss. The dispute underscores growing tensions between crypto firms and law enforcement over asset recovery and could set a precedent for stablecoin issuers in similar situations.